Sony Ericsson swung to a lower than expected third-quarter loss as the handset vendor’s cost cutting programme began to take effect. The London-based company reported a net loss of €25 million (US$33.8 million) for the quarter, down from a profit of €267 million in the same period a year ago, while sales dropped 9.7 percent to €2.81 billion. However, the results were not as bad as many analysts had feared. According to a Bloomberg report, analysts in an SME Direkt survey had predicted a loss of €141 million on sales of €2.74 billion. “All in all, this seems like a positive surprise amidst all the challenges Sony Ericsson has been facing,” said Deutsche Bank analyst Jussi Uskola.

The vendor is currently in the process of implementing a cost cutting programme that will see it eliminate 2,000 jobs globally, and is targeting savings of €300 million a year by the second half of next year. Sony Ericsson said the cost reduction is progressing “in line with expectations” and the company booked restructuring costs of €35 million in the quarter. “As expected the third quarter has continued to be challenging,” said chief executive Dick Komiyama in a statement. “We are committed to executing our alignment plan as speedily as possible to ensure we have the right size and organisational structure.” Sony Ericsson’s unit sales fell to 25.7 million from 25.9 million a year earlier, beating an SME Direkt estimate of 24.3 million units. The average selling price for its phones in the quarter was €109, down from €116 in the previous quarter and from €120 a year ago.